Unemployment 6893
194. Which of the following is not an explanation for the existence of unemployment in the long run?
a. it takes time for workers to search for the jobs that are best suited for them
b. minimum-wage laws
c. unions
d. the business cycle
195. Frictional unemployment is thought to explain relatively
a. short spells of unemployment, as is structural unemployment.
b. long spells of unemployment, as is structural unemployment.
c. short spells of unemployment, while structural unemployment is thought to explain relatively
long spells of unemployment.
d. long spells of unemployment, while structural unemployment is thought to explain relatively
short spells of unemployment.
6894 Unemployment
196. People who are unemployed because wages are, for some reason, set above the level that brings
labor supply and demand into equilibrium are best classified as
a. cyclically unemployed.
b. structurally unemployed.
c. frictionally unemployed.
d. discouraged workers.
197. John is a stockbroker. He has had several job offers, but he has turned them down because he
thinks he can find a firm that better matches his tastes and skills. Curtis has looked for work as
an accountant for some time. While the demand for accountants does not appear to be falling,
there seems to be more people applying than jobs available.
a. John and Curtis are both frictionally unemployed.
b. John and Curtis are both structurally unemployed.
c. John is frictionally unemployed, and Curtis is structurally unemployed.
d. John is structurally unemployed, and Curtis is frictionally unemployed.
Unemployment 6895
198. Meredith is looking for work as a computer programmer. Although her prospects are good, she
has not yet taken a job. Julie is looking for work in a steel mill. Every time she shows up for an
interview, there are more people looking for work than there are openings. Someone waiting in
line with her tells her it has been that way for a long time.
a. Meredith and Julie are both frictionally unemployed.
b. Meredith and Julie are both structurally unemployed.
c. Meredith is frictionally unemployed, and Julie is structurally unemployed.
d. Meredith is structurally unemployed, and Julie is frictionally unemployed.
199. Jenna is searching for a job that suits her tastes about where to live. Mary is looking for a job
that makes best use of her skills.
a. Jenna and Mary are both frictionally unemployed.
b. Jenna and Mary are both structurally unemployed.
c. Jenna is frictionally unemployed, and Mary is structurally unemployed.
d. Jenna is structurally unemployed, and Mary is frictionally unemployed.
6896 Unemployment
200. Bob is looking for work after school, but everywhere he fills out an application, the managers
say they always have a lot more applications than open positions. Tom has a law degree. Several
firms have made him offers, but he thinks he might be able to find a firm where his talents could
be put to better use.
a. Bob and Tom are both frictionally unemployed.
b. Bob and Tom are both structurally unemployed.
c. Bob is frictionally unemployed, and Tom is structurally unemployed.
d. Bob is structurally unemployed, and Tom is frictionally unemployed.
201. Adam is looking for a job in marketing. He has had some offers and his prospects are promising,
but he has not yet accepted a job. Amanda lost her job working for Mercury Bicycles because
many customers decided they prefer bicycles manufactured by Ultimate Bicycles instead. Who
is frictionally unemployed?
a. Adam but not Amanda
b. Amanda but not Adam
c. both Adam and Amanda
d. neither Amanda nor Adam
Unemployment 6897
202. Sandy has graduated from college and is devoting her time to searching for a job. She has seen
plenty of openings but has not yet been offered one that best suits her tastes and skills. Sandy is
a. structurally unemployed. Structural unemployment exists even in the long run.
b. structurally unemployed. There is no structural unemployment in the long run.
c. frictionally unemployed. Frictional unemployment exists even in the long run.
d. frictionally unemployed. There is no frictional unemployment in the long run.
203. Teenagers have more frequent unemployment spells so, on average, they spend more time
searching for jobs. Other thing the same, this means that teenagers have a
a. higher unemployment rate. If a larger portion of the adult population were teenaged, the
natural rate of unemployment would be higher.
b. higher unemployment rate. The portion of the adult population that is teenaged does not affect
the natural rate of unemployment.
c. lower unemployment rate. If a larger portion of the adult population were teenaged, the
natural rate of unemployment would be lower.
d. lower unemployment rate. The portion of the adult population that is teenaged does not affect
the natural rate of unemployment.
6898 Unemployment
204. The natural unemployment rate includes
a. both frictional and structural unemployment.
b. neither frictional nor structural unemployment.
c. structural but not frictional unemployment.
d. frictional but not structural unemployment.
205. Cyclical unemployment is caused by
a. frictional and structural unemployment
b. frictional but not structural unemployment
c. structural but not frictional unemployment
d. neither frictional nor structural unemployment
Unemployment 6899
206. Every month, the Bureau of Labor Statistics surveys 160,000 business establishments to help
determine the
a. number of people unemployed.
b. number of jobs the economy has gained or lost.
c. size of the labor force.
d. number of people who own their own businesses.
207. Every month when the Bureau of Labor Statistics (BLS) announces the unemployment rate, it
also announces the number of jobs the economy has gained or lost. Where does the BLS get the
data about jobs?
a. from the survey of 60,000 households, which is called the Current Population Survey
b. from the Establishment Survey that measures both frictional and structural unemployment
c. from the survey of 160,000 business that have over 40 million workers on their payrolls
d. from the Congressional Budget Office, which also calculates the GDP of the United States
6900 Unemployment
Multiple Choice – Section 02: Job Search
1. Job search
a. is one reason economies always experience some unemployment.
b. is the process of matching workers with appropriate jobs.
c. would not be a problem if all workers and all jobs were the same.
d. All of the above are correct.
2. If all workers and all jobs were the same such that all workers were equally well suited for all jobs,
then there would be no
a. cyclical unemployment.
b. frictional unemployment.
c. natural rate of unemployment.
d. structural unemployment.
Unemployment 6901
3. Sectoral shifts in demand for output
a. create structural unemployment.
b. immediately reduce unemployment.
c. increase unemployment due to job search.
d. do not affect demand for labor.
4. From time to time, the demand for workers has risen in one region of the United States and fallen
in another. This illustrates
a. frictional unemployment created by efficiency wages.
b. structural unemployment created by efficiency wages.
c. frictional unemployment created by sectoral shifts.
d. structural unemployment created by sectoral shifts.
6902 Unemployment
5. Suppose that consumers decide to walk to work more frequently and drive cars less. Companies
that make walking shoes hire workers, while automobile companies lay off workers. This is an
example of
a. frictional unemployment created by sectoral shifts.
b. frictional unemployment created by efficiency wages.
c. structural unemployment created by efficiency wages.
d. structural unemployment created by sectoral shifts.
6. Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and
steak houses need more workers. The unemployment created by this change is
a. frictional unemployment created by efficiency wages.
b. frictional unemployment created by sectoral shifts.
c. structural unemployment created by efficiency wages.
d. structural unemployment created by sectoral shifts.
Unemployment 6903
7. Suppose the demand for hard-wood flooring increases, while the demand for wall-to-wall carpeting
decreases. Based on this change in consumer tastes, the demand for hard-wood-flooring factory
workers in North Carolina increases, while the demand for carpet factory workers in Georgia
decreases. This is an example of
a. frictional unemployment created by efficiency wages.
b. structural unemployment created by efficiency wages.
c. frictional unemployment created by sectoral shifts.
d. structural unemployment created by sectoral shifts.
8. Suppose that an anti-smoking campaign in Moscow, Russia, is successful so that Muscovites
smoke less and chew gum more. Tobacco companies lay off workers, while chewing gum
manufacturers employ more workers. This is an example of
a. structural unemployment created by efficiency wages.
b. structural unemployment created by sectoral shifts.
c. frictional unemployment created by efficiency wages.
d. frictional unemployment created by sectoral shifts.
6904 Unemployment
9. The invention of the telegraph led to the loss of jobs for those who had delivered mail by horse but
created jobs for telegraph operators and delivery persons. This is an example of
a. structural unemployment created by efficiency wages.
b. structural unemployment created by sectoral shifts.
c. frictional unemployment created by efficiency wages.
d. frictional unemployment created by sectoral shifts.
10. Suppose that the Bureau of Labor Statistics predicts that the number of jobs for dental hygienists
will grow faster than most occupations while the number of jobs for bookbinders will decline. This
change in the labor market could lead to
a. frictional unemployment created by efficiency wages.
b. structural unemployment created by efficiency wages.
c. frictional unemployment created by sectoral shifts.
d. structural unemployment created by sectoral shifts.
Unemployment 6905
11. Frictional unemployment is inevitable because
a. sectoral shifts are always happening.
b. there is a federal minimum-wage law in the U.S.
c. some people do not want to be employed.
d. unions are very popular in the U.S.
12. Which of the following was not among the four industries with the largest employment in the
United States a century ago?
a. cotton goods
b. men’s clothing
c. meat packing
d. lumber
6906 Unemployment
13. The production of which of the following goods was among the four industries with the largest
employment in the United States a century ago?
a. horse shoes
b. woolen goods
c. candles
d. minerals from mining
14. Which of the following is among the four industries with the largest employment in the United
States today?
a. lumber
b. men’s clothing
c. communications
d. cotton goods
Unemployment 6907
15. Which of the following is not among the four industries with the largest employment in the United
States today?
a. lumber
b. aircraft
c. communications
d. electrical components
16. About what percentage of jobs are destroyed every year, and about what percentage of workers
leave their jobs in a typical month?
a. 1% and 5%
b. 5% and 1%
c. 3% and 10%
d. 10% and 3%
6908 Unemployment
17. Which of the following is not correct?
a. Frictional unemployment is inevitable in a dynamic economy.
b. Although the unemployment created by sectoral shifts is unfortunate, in the long run such
changes lead to higher productivity and higher living standards.
c. At least 10 percent of U.S. manufacturing jobs are destroyed every year.
d. More than 13 percent of U.S. workers leave their jobs in a typical month.
18. Which of the following is a source of frictional unemployment?
a. changes in the composition of demand among industries or regions
b. minimum wages
c. labor unions
d. None of the above is correct.
Unemployment 6909
19. Frictional unemployment can be the consequence of
a. workers leaving existing jobs to find ones they like better.
b. one industry declining while another is growing.
c. changes in the working conditions offered by competing firms.
d. All of the above are correct.
20. Public policy
a. can reduce both frictional unemployment and the natural rate of unemployment.
b. can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment.
c. cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment.
d. cannot reduce either frictional unemployment or the natural rate of unemployment.
21. Policies that reduce the time it takes unemployed workers to find new jobs
a. can reduce both frictional unemployment and the natural rate of unemployment.
b. can reduce frictional unemployment, but they cannot reduce the natural rate of unemployment.
c. cannot reduce frictional unemployment, but they can reduce the natural rate of unemployment.
d. cannot reduce either frictional unemployment or the natural rate of unemployment.
6910 Unemployment
22. Which of the following helps to reduce frictional unemployment?
a. government-run employment agencies
b. public training programs
c. the Internet
d. All of the above are correct.
23. Which of the following does not help reduce frictional unemployment?
a. government-run employment agencies
b. public training programs
c. unemployment insurance
d. All of the above help reduce frictional unemployment.
Unemployment 6911
24. Providing training for unemployed individuals is primarily intended to reduce
a. frictional unemployment.
b. seasonal unemployment.
c. structural unemployment.
d. cyclical unemployment.
25. Government-run employment agencies and public training programs are operated by the
government to try to facilitate job search and reduce unemployment.
a. Almost all economists agree that such programs are of no use.
b. Almost all economists agree that such programs work very well.
c. Some economists claim that the government can do these things no better than firms and
individuals could do them for themselves.
d. Some economists claim that these programs increase frictional unemployment.
6912 Unemployment
26. Of the following groups, who is eligible for unemployment insurance benefits?
a. the unemployed who quit their jobs
b. the unemployed who were laid off because their previous employers no longer needed their
skills
c. the unemployed who were fired for cause
d. the unemployed who just entered the labor force
27. Lucy quit her job because she was unhappy at work. Genevieve was fired because she frequently
surfed the Internet rather than working on her assigned tasks. Who is eligible for unemployment
insurance benefits?
a. both Lucy and Genevieve
b. Lucy but not Genevieve
c. Genevieve but not Lucy
d. neither Lucy nor Genevieve